Episode Summary: "The Battery Solution for AI's Power Problem"

Podcast: Open Circuit
Host/Author: Latitude Media
Episode Released: May 7, 2025
Guests: Alan Cooper (CEO of On Energy) and Ricardo de Acevedo (CTO of On Energy)

1. Founders' Journey: From Childhood Friends to Energy Innovators

The episode opens with a nostalgic glimpse into the long-standing friendship and partnership between Alan Cooper and Ricardo de Acevedo. Their collaboration traces back to a third-grade classroom in Caracas, Venezuela, where they first met. Alan shares, “[00:18] Ricardo and I actually have been best friends since elementary school. We met in the third grade in Caracas, Venezuela, where we were both originally from.” Ricardo adds, “[00:28] We go way back.” Their early ventures, including organizing memorable parties dubbed the "biz club," laid the foundation for their entrepreneurial spirit, despite modest financial gains.

2. From Early Ventures to On Energy: Embracing the Energy Transition

Transitioning from their youthful endeavors, Alan and Ricardo co-founded On Energy, a storage integration company aimed at addressing critical power challenges in the AI era. Stephen Lacy highlights their evolution: “[00:43] Alan and Ricardo have come a long way since their first venture as teenagers, from throwing parties to co-founding the storage integration company On Energy. And as they told Steve and Lacy, they're now working to solve one of the most critical power challenges of the AI age.”

Alan’s background in the volatile oil and gas industry, influenced by his entrepreneurial father, prompted his shift towards renewables and sustainability in 2015. “[01:37] In 2015, during sort of a lull in activity in oil and gas, I decided to really pursue my passion in renewables and in sustainability and met up with Ricardo, who'll tell you the rest of the story.” Meanwhile, Ricardo’s stint on Wall Street during the 2008 financial crisis steered him back to academia, where he earned a master’s in electrical engineering with a focus on microgrid control systems.

3. Identifying the Power Storage Opportunity in Latin America

In a pivotal research project initiated by Alan, the duo identified a burgeoning peak shaving trend in California. Ricardo explains, “[02:01] From the beginning, I knew Wall street wasn't it for me. So I moved to Miami and I decided to go back to school, get my master's in electrical engineering. And I did my research and my thesis in microgrid control systems. ... We identified the peak shaving trend that was going on in California with STEM and Green charge networks. Advanced microbup solutions.” This insight led them to deploy battery systems in Peru and Mexico in 2016, targeting industrial customers burdened by high electricity demand charges. Ricardo notes, “[02:55] Solar was already getting saturated or really we didn't see any space to innovate or really add value. But really the missing piece is energy storage... Peru had the highest demand charges in Latin America.”

4. Overcoming Component Shortages: Building Proprietary Battery Solutions

Faced with the absence of off-the-shelf components suitable for their ambitious projects, Alan and Ricardo took a hands-on approach to develop their own systems. Alan recounts, “[03:42] Reluctantly, yeah.” Ricardo elaborates on their challenges: “[03:45] We were like phoning Tesla and Fluence and LG and the big players and we weren't getting the time of day... we were able to do that initially for very small systems, 30 kilowatt systems we started and then scaled up from there.” Leveraging Alan’s expertise in Supervisory Control and Data Acquisition (SCADA) systems, they adapted these for energy storage, bridging academic research with practical, field-proven technology.

5. Innovating the Uninterruptible Power Supply (UPS) for Modern Demands

A significant breakthrough came when a client approached them with frequent power blackouts. Alan describes the moment: “[04:54] We had a customer come to us with a problem at a facility that they were having five blackouts a week... this is an absolutely problem that we want to take on.” This led to the development of a proprietary UPS system that not only provided backup power but also engaged in peak shaving and energy arbitrage, making it a self-sustaining solution.

Ricardo provides a technical deep dive into their innovative UPS system:
“[08:26] Most people will be familiar with UPS's from your computer, you know, little box by your computer that when, whenever the lights go out, the computer is backed up and you don't lose your word document. This is the same concept, but blown up in industrial scale... We're pairing it with advanced controls so that we can control the charging and discharging of the battery.” This system operates at medium voltage, decoupling the grid from the load and offering durations from 15 minutes up to four hours, thereby providing unprecedented flexibility and reliability.

6. Addressing AI Data Centers' Power Volatility

AI-driven data centers present unique challenges due to their highly volatile power usage. Ricardo explains, “[12:34] Yes. Which is insane. Right. So we actually are discussing with a client that is developing a thousand megawatt facility and they were telling us the load swings are going to be 40% or 400 megawatts every 10 seconds.” Such rapid fluctuations are beyond the capacity of traditional electrical grids, necessitating innovative solutions like On Energy’s battery-integrated UPS systems. These systems act as buffers, maintaining constant power draw from the grid while handling instantaneous load changes internally, thus shielding both the data center and the grid from instability.

7. Economic Incentives: Revenue Opportunities Through Grid Services

The integration of these advanced UPS systems opens multiple revenue streams for data centers. Ricardo outlines various opportunities:
“[17:10] ...demand response programs, there's peak shaving behind the meter, there's energy arbitrage, and then there's also even ancillary services that you could participate in ERCOT pjm.” For instance, participation in programs like ERCOT’s 4CP (4 Coincident Peak) can make data centers financially viable while contributing to grid stability. Alan emphasizes the broader impact:
“[15:13] ...the speed to interconnection and the cost of energy are the fundamental drivers of where these data centers are gonna pop up and are a fundamental limiting factor to how quickly we can bring these systems online... The objective is how do you connect more data centers at the cadence that you promised your shareholders you would.”

8. Future Outlook: Batteries as Multifaceted Grid Solutions

Looking ahead, Alan and Ricardo express optimism about the evolving role of batteries in the energy grid. Alan states, “[19:47] My feeling on applications is that many of them have been pretty well proven and that this industry is moved not by what the technology can actually do, but rather what it's being paid to do.” He underscores the importance of regulatory frameworks in unlocking the full potential of battery technologies. Ricardo echoes this sentiment, highlighting the current momentum and the overcoming of previous investment hesitations:
“[20:43] ...the momentum is unstoppable and we're really at that inflection point, I feel.” They foresee batteries becoming even more integral, serving as versatile tools (“Swiss army knives”) for a myriad of energy challenges, contingent on supportive policies and market incentives.

9. Conclusion: Pioneering Resilient, Grid-Interactive Data Centers

In wrapping up, the episode underscores On Energy's pivotal role in pioneering resilient, grid-interactive data centers. By integrating advanced battery systems with proprietary UPS technology, Alan Cooper and Ricardo de Acevedo are not only addressing the immediate power challenges posed by AI-driven infrastructures but are also laying the groundwork for a more flexible and reliable energy grid. As Alan aptly puts it, “[17:50],” “...how do I help you interconnect faster, how do I help you secure perfect power quality and have the most reliable data center on the market?” This holistic approach positions On Energy at the forefront of the energy transition, driving both industrial transformation and sustainable technological growth.

Notable Quotes:

• Alan Cooper [00:18]: “Ricardo and I actually have been best friends since elementary school... we started throwing parties when we were 15 years old that people apparently still remember.”

• Ricardo de Acevedo [03:42]: “We were phoning Tesla and Fluence and LG and the big players and we weren't getting the time of day... we were able to scale up from very small systems.”

• Ricardo de Acevedo [08:26]: “Most people will be familiar with UPS's from your computer... we're doing that, but we're pairing it with advanced controls...”

• Ricardo de Acevedo [12:34]: “...they were telling us the load swings are going to be 40% or 400 megawatts every 10 seconds. The grid is just not designed to handle that.”

• Alan Cooper [17:50]: “...how do I help you interconnect faster, how do I help you secure perfect power quality and have the most reliable data center on the market?”

For more insights and to explore On Energy's turnkey resiliency solutions for utilities and enterprise customers, visit OnEnergy.